Surging global electricity demand underlines need for grids and flexibility investments.

Global power demand is set to grow by more than 3.5% per year on average over the rest of this decade, with electricity generation from renewables, natural gas and nuclear all expanding to keep pace, according to our new annual report. 

The International Energy Agency (IEA) released its Electricity 2026 report on February 6, 2026. This annual analysis examines global electricity markets, trends, and policy developments, with forecasts extended to 2030 (2026-2030 period). It emphasizes the arrival of the Age of Electricity, where demand grows rapidly due to electrification across sectors and emerging technologies like AI and data centers.

Electricity 2026 provides in-depth analysis of recent trends and policy developments across the sector. It shows that global electricity demand is on course to grow at least 2.5 times as fast as overall energy demand through 2030 as the Age of Electricity takes hold. This is driven by rising industrial use of electricity, the continued uptake of electric vehicles, higher air conditioning use and the expansion of data centres and AI.

By 2030, renewables and nuclear are together expected to be generating 50% of global electricity. Natural gas-fired output is also set to grow through 2030, while coalfired generation loses ground globally as renewables expand. As a result, global carbon dioxide emissions from electricity generation are expected to remain roughly flat between now and 2030.

The report emphasises that these trends – growing demand, an increasingly weather-dependent mix of power generation sources, and evolving electricity consumption patterns and technologies – require a rapid and efficient expansion of both electricity grids and system flexibility. It also discusses measures to help ensure the affordability of electricity and the security and resilience of power systems, issues that are increasingly coming into focus for policymakers around the world.

Electricity Demand Growth

Global electricity demand rises at an average annual rate of 3.6% from 2026 to 2030 – 50% higher than the previous decade’s average.

Growth in 2024 reached 4.4%, followed by 3% in 2025; future drivers include industry, electric vehicles (EVs), air conditioning, and data centers/AI.

For the first time in three decades (outside crises), demand outpaced economic growth in 2024, a trend expected to continue – electricity consumption grows at least 2.5 times faster than overall energy demand through 2030.

Regional Breakdown

Emerging economies drive nearly 80% of growth: China contributes 50% (adding demand equivalent to today’s EU total, at 4.9% annual growth). India and Southeast Asia gain share, fueled by economic expansion and rising air conditioning needs. Advanced economies contribute 20% after 15 years of stagnation: US growth 2% annually (half from data centers); EU 2% annually after a rebound.

Electricity Supply and Generation

Renewables grow by 1,000 TWh annually: solar PV alone adds over 600 TWh/year. Renewables and nuclear together reach 50% of global generation by 2030 (up from 42% today) – renewables overtake coal in total output. Nuclear sets a 2025 record and grows steadily: most increases in emerging economies like China.

Natural gas rises 2.6% annually driven by the US and Middle East. Coal declines slightly overall (returning to 2021 levels), remains the single largest source in 2030, despite regional drops in China and gains elsewhere. Renewables, gas, and nuclear meet all net additional demand. Global emissions from electricity remain roughly flat through 2030, aided by the shift to low-emission sources.

 Grids, Flexibility, and Challenges

Rapidly evolving systems require major grid expansion and flexibility, variable renewables (solar/wind) rise from 17% to 27% of generation by 2030. Over 2,500 GW of projects (renewables, storage, data centers) stall in connection queues. Annual grid investment must increase 50% (from USD 400 billion today).

Solutions like non-firm connections and grid-enhancing technologies could unlock 1,200-1,600 GW of capacity. Utility-scale batteries grow rapidly in regions like California, Germany, Texas, and the UK providing short-term flexibility. Additional concerns include affordability (household prices rising faster than incomes) and security risks (aging infrastructure, extreme weather, cyber threats).

The report highlights the need for policy focus on grids, flexibility, efficiency, and resilience to support secure, affordable, and sustainable electricity in this new era.

/IEA, X/